Alf Young: Statistical massaging harms debate

OUR leaders must not be allowed to tailor findings in government expenditure reports to their own ends, writes Alf Young

WHEN Alex Salmond talked to Andrew Neil last weekend about the SNP’s decision to drop any idea of an independent Scotland adopting the euro in the foreseeable future, the First Minister deployed the Keynesian defence. “When the facts change,” he told the new presenter of the BBC’s Sunday Politics, “I change my mind.”

We should all be grateful our First Minister possesses such mental flexibility. Had Scotland been “Free by 93” – the slogan deployed by nationalists when Jim Sillars stormed to victory in the Govan by-election in 1988 – had the SNP then delivered on its “independence in Europe” mission adopted that same year, Scotland might by now have been consumed by what Salmond’s Cabinet colleague, Bruce Crawford, this week called the “all-devouring eurozone crisis”.

However, so-called “facts” are not always what they seem. Take that dictum with which we started, widely attributed to the great 20th century economist, John Maynard Keynes. There is no hard evidence Keynes ever uttered these words.

His biographer, Lord Skidelsky, has suggested the link is almost certainly apocryphal. Some think the adage might have originated with another Nobel Prize-winning economist, Paul Samuelson. Last year, the front-runner for the Republican nomination in this year’s presidential race, Mitt Romney, even attributed it to Winston Churchill!

Whoever said it, there’s a lot to be said for political flexibility in the face of changing circumstances. But that said, we can be sure that, no matter how much they trim and tweak the independence package on offer to maximise the “yes” vote in 2014, the SNP will never change its mind on the goal itself. Independence is what defines the party’s very existence.

So, in the welter of claim and counter-claim to come over the next 30-odd months, all of us open-minded enough to want to consider the arguments on all sides and come to our own decisions should beware of politicians, of whatever stripe, who subscribe to a dubious variant of what Keynes probably didn’t say. I confess. I made this one up. When the facts prove inconvenient, I spin them to mean whatever I want them to mean.

In the early hair-shirt years of the incoming Blair government at Westminster, the new chancellor, Gordon Brown, adopted restrictive Tory spending plans even his Tory predecessor Ken Clarke thought undeliverable. Then, with his reputation for prudence established, he turned the spending taps full on. But, with another election looming, the additional money Brown was making available for health and education over the following three years had to be massaged to make the boost to spending look as generous as possible.

The magic number the chancellor announced was £40 billion. But the only way to get there was to double and triple count the actual annual increases planned for both the NHS and schools budgets over those three years. It was subtle presentational con. What more you spend on one service in one year cannot be switched to another priority the next. Or the year after that. The real terms spending boost over the period was nearer £27bn.

Some of us pointed that out at the time. We were given a hard time for daring to question UK Treasury “facts”. Ever since, I’ve been deeply sceptical of politicians bearing numerical gifts. I’m not alone. Surveys in the recent past have shown the UK coming 27th out of all 27 EU members states in the trust people invest in the reliability of their government’s statistics.

My antennae were twitching again on Wednesday when the latest report on government expenditure and revenue for Scotland was launched. This one, the 18th in a series started before Holyrood existed, covers the year 2010-11. It is produced by National Statistics and kitemarked as “relevant and reliable” work by the independent UK Statistics Authority.

The SNP used to regard “GERS”, as it’s called, as the work of some scheming unionist devil. But, as the years rolled on, devolution arrived, and they found themselves in power in Scotland, they’ve learned, like other governments of other hues in the past, how to spin any message to their own ends. The unvarnished kitemarked report appears, then a separate ministerial spin on what it says follows – together with the full range of social media interpretations.

“Facts are chiels that winna ding,” claimed Alex Salmond at First Minister’s Questions on Thursday, on being fed a patsy question about the latest GERS from one of his backbenchers. That line from the Burns poem A Dream, is one Salmond has used many times before. But, of course, facts are chiels that do ding, as the First Minister had conceded to Andrew Neil, over the euro, just a few days before.

Worse, the “facts” he and his colleagues have extracted from the latest GERS report don’t actually appear anywhere in its 81 pages.

You will find them in their purest form in a soundbite of just over a minute from Salmond himself on YouTube. He calls them “strong, powerful figures”. They show, he claims, that, as an independent nation, over the past five years, “we would have been £8bn better off, which is about £1,600 a head for every man, woman and child in the country”. In 2010-11, we would all have been “£500 better off”.

The reality of the GERS analysis is that, even with a 90.5 per cent share of North Sea revenues added into the Scottish figures for 2010-11, the latest five-year fiscal balance in Scotland between revenues and expenditure produces a cumulative deficit of £35.3bn. Were we just taking our share of the net fiscal balance of the UK as a whole, Scotland would have been a cumulative £43.9bn in deficit.

We are all “better off” to the tune of £1,600 over five years or £500 in 2010-11 only in the sense that, if we used the entire proceeds of the North Sea not to build an Oil Fund but to reduce our national indebtedness we would each be that much less in the red than we might otherwise be.

Projecting that as being “better off” as the First Minister did both on YouTube and at questions on Thursday is the kind of numerical sophistry that ultimately rebounded on Gordon Brown.

If the great debate to come is to be free, on all sides, of facts that are dinging all over the place and end up bereft of credibility in the public square, perhaps what we need is not just an independent Electoral Commission adjudicating on the referendum process, but something more.

Another arms-length and trusted body – a statistical equivalent of a truth and reconciliation commission – that can audit and arbitrate upon the claims and counter-claims that will be dinging this way and that from now to polling day.

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